IBM, NetApp team up against EMC

Posted on May 01, 2005

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By Heidi Biggar

IBM and Network Appliance last month announced a broad OEM agreement designed to combat mutual arch-rival EMC, primarily in the NAS market.

The deal gives IBM OEM privileges to Network Appliance’s full line of hardware and software products, including its NearStore and V-Series families. In addition, Network Appliance will position IBM’s Tivoli Storage Manager (TSM) software and TotalStorage tape devices as “preferred” solutions, although NetApp will not resell any IBM products. (Network Appliance officials claim that the TSM deal with not affect NetApp’s existing relationship with Veritas.)

By reselling NetApp’s NAS products, IBM fills a notable hole in its storage portfolio; for NetApp, the deal means a stronger channel presence. Officials for both companies say that any overlap between the two companies’ distribution channels is small and that the two companies, particularly Network Appliance, have much to gain from the extended reach afforded by the agreement.

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Tony Asaro, a senior analyst at the Enterprise Strategy Group (ESG) research and consulting firm, says the agreement has great potential-particularly for IBM, which has been nursing an ailing NAS lineup. “IBM has really had no presence in NAS, and to be the leader in storage you have to have it,” says Asaro.

As for the tape and software products IBM brings to the table, Asaro says that part of the deal “is more of a gesture” on Network Appliance’s part because selling tape is not one of NetApp’s strong suits.

Andy Monshaw, general manager of IBM’s storage business, says users can expect IBM to begin withdrawing its existing TotalStorage NAS products from the market over the short term, although no official plans have been announced yet to formally retire the products.

International Data Corp. (IDC) expects NAS market revenues to surge from approximately $1.68 billion in 2004 to more than $3 billion in 2008.

Last year, NetApp had a 36.9% ($619 million in revenues) share of the total NAS market, followed by EMC with 33.8% ($567 million), according to IDC. (Hewlett-Packard and Dell came in a distant third and fourth with 6.5% and 6.2%, respectively.)

Also looking to grow its piece of the NAS pie, Hitachi Data Systems last week announced that it is making “a full-scale assault on the NAS market.” It introduced embedded NAS blades for its TagmaStore Universal Storage Platform (USP). Last year, Hitachi’s NAS revenue totaled $25 million-a 1.5% market share, according to IDC.


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